According to Labor Department data released this morning, U.S. job openings fell to 7.56 million in March, down from 8.12 million in February and marking the lowest level since last September. It's the third consecutive monthly decline, suggesting employers are becoming more cautious about hiring.
I've been watching the labor market indicators closely for months, and this definitely represents a shift from the worker-friendly environment we've had since the pandemic. The question is whether we're seeing a healthy normalization or the beginning of something more troubling.
"The labor market is finally returning to balance," said Treasury Secretary Janet Yellen at a press conference this morning. "This should help moderate wage pressures without significantly increasing unemployment."
The sectors showing the biggest drops in openings were retail (-112,000), manufacturing (-98,000), and professional services (-87,000). Healthcare and education, meanwhile, still show robust demand for workers.
The so-called "quits rate" – which measures workers voluntarily leaving their jobs and is considered a sign of confidence – also edged down to 2.2%, its lowest since 2020. Remember when everyone was talking about the "Great Resignation"? Those days seem long gone.
Wall Street had a mixed reaction to the news. The Dow Jones Industrial Average initially jumped on hopes that cooling labor demand might give the Fed room to cut interest rates, but those gains faded by midday as concerns about economic slowdown took hold.
For job seekers, the changing landscape means the days of multiple offers and aggressive signing bonuses are probably behind us. I've noticed this firsthand – my neighbor's daughter just graduated from college and is finding the job hunt much tougher than her brother did two years ago.
Wage growth is also moderating, with average hourly earnings up 3.9% year-over-year in March, down from peaks above 5% in 2022. That's still above pre-pandemic norms but trending downward.
The big question now is whether this cooling job market will translate into rising unemployment in the coming months. So far, the unemployment rate has held steady at 4.2%, but if hiring freezes turn into layoffs, that could change quickly.
The April jobs report, due this Friday, will give us a clearer picture of where things stand. Economists are forecasting about 175,000 new jobs – solid, but not spectacular growth. I'll be watching closely to see if reality matches those expectations.
